Unilever's bankers invite PE for tea as part of wider review

British-Dutch consumer giant Unilever's global portfolio shift looks set to hit its Australian business, with private equity firms sounded about their appetite in certain parts.

Street Talk understands Unilever has launched an informal strategic review of its Australian and New Zealand business, which includes well known household brands like Omo, Rexona, Lipton and Vaseline.

CEO of Unilever Australia and New Zealand, Clive Stiff. AFR

It is understood the review has been pitched internally as part of the group's wider "transformation" program, which has already seen the company's portfolio shift towards e-commerce, out of home and health and beauty products in recent years.

But the emergence of investment banks in the process, has sparked expectations at least externally about the prospect for select asset sales.

While widespread asset sales are not expected, Street Talk understands Unilever has had investment bank UBS considering market appetite for a handful of brands including premium tea and teaware shops owner T2.

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Sources said UBS had been reaching out to consumer brands-focused private equity firms in recent weeks, setting up meetings to discuss their potential interest in parts of the Unilever portfolio.

The private equity types were told there were no brands for sale, however the meetings clearly flagged that divestments were an option. T2 was one of the names mentioned.

UBS is the company's long term adviser globally.

It comes as Alan Jope, the new-ish CEO of the $220 billion company, seeks to turn the 90-year old consumer goods giant into something more fleet footed and ready for the future. That means remodelling the portfolio, both in terms of the brands and the places where Unilever makes its sales.

Jope recently told investors he was after "brands with purpose" and signalled out 28 sustainable living brands that he said grew 69 per cent faster. Those brands included Rexona, Domestos and Dove.

Of course Unilever has never been shy of making deals. The company has made 32 acquisitions since 2015 worth €11 billion ($18 billion), according to a recent investor presentation, and another $13 billion of divestments.

It comes as private equity firms run the numbers on a handful of boutique Australian brands, including L Catterton's RM Williams and Quadrant Private Equity's restaurant chain Rockpool Dining Group and gyms business.

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Sarah Thompson has co-edited Street Talk since 2009, specialising in private equity, investment banking, M&A and equity capital markets stories. Prior to that, she spent 10 years in London as a markets and M&A reporter at Bloomberg and Dow Jones. Email Sarah at sarah.thompson@afr.com

Anthony Macdonald co-edits Street Talk, specialising in private equity, investment banking, M&A and equity capital markets. He has 10 years' experience as a business journalist and worked at PwC, auditing and advising financial services companies. Connect with Anthony on Twitter. Email Anthony at a.macdonald@afr.com

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